Editor's Notebook

or federal agencies, the 1990s have been the decade of downsizing. Ever since Congress and the White House decided to get serious about balancing the budget (with the help of a roaring economy), agencies have become smaller, more efficient and more adept at stretching the limited dollars they have received. But make no mistake, the federal government is still one big spender.

In fact, agencies dished out more than $181 billion on large prime contracts for goods and services in fiscal 1998, up 4 percent from the year before. The Defense Department accounted for almost 65 percent of those purchases. But civilian agencies are no slouches, with fully $65 billion in contract awards in 1988. NASA alone spent nearly $11 billion, as the agency continues to turn more and more of its budget over to contractors.

The federal contractor ranks are dominated by a small group of mega-companies formed as a result of the consolidation of the defense industrial base at the end of the Cold War. The king of the contractors, Lockheed Martin, captured fully 10 percent of the federal pie in 1998, with $18.5 billion in contracts. A total of eight companies took in more than $2 billion each in contract awards last year.

But the federal market isn't just for the big boys. Newcomers are carving out substantial niches. Dell Computer Corp., for example, climbed 55 places on the Top 200 this year (from 124 to 69), leaping from $133 million in sales in fiscal 1997 to more than $266 million last year.

The rankings of contractors that appear in this issue are compiled for Government Executive by Eagle Eye Publishers Inc. from data covering fiscal 1998 provided by the Federal Procurement Data Center. The data center, part of the General Services Administration, gets its information from reports filed by other federal agencies.

Most of the vendors are private, for-profit U.S. companies. Some of the top contractors are universities or other nonprofit institutions, and a few are foreign-owned firms.

The data cover only prime contracts worth more than $25,000. In addition to the $181.8 billion spent on such contracts last year, agencies spent another $20 billion or so on smaller purchases and classified contracts, pushing total procurement spending over the $200 billion mark.

Companies ranked in this issue are parent companies; outlays to subsidiaries or divisions are "rolled up" to the parent. Mergers and acquisitions are not reflected in the listings unless they became final before fiscal 1998 ended. For joint ventures, we have assigned each partner in the venture an equal portion of payments made under the contract.

FOR MORE INFORMATION: Eagle Eye Publishers can be reached at (703) 359-8980 or via e-mail at info@eagleeyeinc.com. GSA's Federal Procurement Data Center is at (202) 401-1529. To obtain additional copies of this issue, call (800) 207-8001.